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Watch 5 players in mortgage muddle

You can't watch the train wreck unfold that is the broken home foreclosure process if you don't know the growing cast of characters. Here's a look at five main players in this still- escalating "ForeclosureGate," and why they matter as Florida and the nation struggle to clean up the mess.

5. The lenders: It's like Alcoholic Anonymous' 12 steps. Some banks are further along the path of admitting they have a problem — like their robo-signing officials who did not check whether thousands of foreclosure affidavits were right. Ally/GMAC, Bank of America and JPMorgan Chase are among those halting some foreclosure efforts. Wells Fargo/Wachovia Bank has no plans to stop.

Why do we care? Because we're still in the early stages and don't know how widespread this will become.

4. The lawyers: Florida's infamous foreclosure mill law firms — including David Stern, Marshall C. Watson, Florida Default Group and Shapiro & Watson — are feeling more law enforcement heat for alleged short cuts in foreclosing on tens of thousands of homes.

Why do we care? Because many more law firms may be robo-signing, too.

3. The processors: Two that produce mortgage documents for lenders are under scrutiny. State investigators are looking at Jacksonville's Lender Processing Services while its Georgia unit Docx LLC is a target of federal prosecutors. Also, a bank-owned service called Mortgage Electronic Registration Systems, or MERS, which makes electronic copies of mortgage sales, is under review.

Why do we care? When a mortgage became "securitized" or bundled into a pool of securities for sale to investors, the mortgage didn't have to be rerecorded each time the note was sold. That makes it hard to tell who actually owns the property. Oops.

2. The title companies: They assure free and clear titles of home ownership but worry about their growing exposure to bogus foreclosure paperwork. Stewart Title Guaranty, big in Florida, is now clamping down on sales of foreclosed homes.

Why do we care? Nobody will buy a home if clear title can no longer be guaranteed.

1. The homeowners: Critics say some foreclosed home­owners get a free ride to stay in homes while the foreclosure process at some major banks is put on hold.

Why do we care? Because it's not clear, thanks to title problems, how many homes already foreclosed upon may prompt judges to hand them back to foreclosed-upon owners. Then what happens? Do banks try a "do-over" to foreclose legally on these homes again?

• • •

Here's a brief followup to Tuesday's column about downtown St. Petersburg's Signature Place developer Joel Cantor's enthusiastic (to some) or Quixote-inspired (to others) mission to try to get the wheels turning for a new stadium for the Tampa Bay Rays. Design firm Populous, invited by Cantor to visit with him about a stadium, now says no such meeting will occur. "We consider the Rays our only client on this matter," the design firm stated. As for the Rays, let's just say they have their own strategy, and Cantor is not a part of it.

As for Cantor, he suggests all the "rancor" that surfaced after Tuesday's column only points out the need for more collaboration, not less.

Robert Trigaux can be reached at trigaux@sptimes.com

Watch 5 players in mortgage muddle 10/13/10 [Last modified: Wednesday, October 13, 2010 8:11pm]
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